Second-Quarter Box Score

As the first big batch of second-quarter earnings came out last week, it looked as if overall quarterly results would echo an old refrain: sales up, profits down. Of the first 130 companies to report, most could point to a slightly higher gross, but the average net was down 7% from 1951. Nevertheless, the stock market found no cause for alarm in the reports. The Dow-Jones industrial average, having forged ahead to a new 22-year high a week before, edged still higher to 279.26 before easing off.

There were no patterns of gains & losses by industries. Too many abnormal factors --the excess-profits tax, war orders, price and production controls--were affecting different companies in too many different ways. Furthermore, with most industries once more in a hotly competitive market, companies again faced the acid test of efficiency, and some passed it far better than others.

The Big Bite. In the electrical industry, for example, Westinghouse reported a 19% rise in gross (to $357 million) and a slight gain in net (to $16 million). Giant General Electric, on the other hand, had a slight decline in sales and a 20% drop in profits to $28 million. The profit drop, said President Ralph Cordiner, resulted from G.E.'s high proportion of defense orders, on which profit margins are small. In all cases, the impact of taxes was enormous. Radio Corporation of America managed to boost sales 22% to a record $142 million, but was able to hike its net per share by only 3-c-, to 25-c-. Reason: R.C.A.'s taxes were up from $766,000 to $4,300,000.

The slump in textiles hit some companies hard. American Viscose (rayon & acetate yarns) saw its net almost halved to $3,400,000. Easing demand in the chemical industry had also shaved many earnings. Union Carbide's net was down 20% to $23 million, and DuPont's firsthalf sales were off along with its net ($2.12 per share v. $2.20 in 1951). On the other hand, fast-expanding Mathieson (TIME, July 21) racked up a 9% profit gain to $2,900,000, and drugmaker Parke, Davis, which has been able to turn a profit for 75 consecutive years, reported record first-half sales of $71 million (up 3%) and record earnings of $10 million (up 12%).

Bright Spots. The brightest spots were among the airlines. United, cashing in on big gains from passengers (up 40%) and mail (up 30%) reported a net of $3,100,000 for the quarter, up 87% to a new record.

And some companies which were hard hit last year by the pinch in metals and the switch to arms work were doing better with the freeing of materials. Studebaker, for example, boosted earnings 47% to $3,900,000. The booming oil companies--which have increased earnings almost without a stop for years--were now having their ups & downs. Phillips Petroleum, Standard Oil (N.J.), and Atlantic Refining were up; Shell, hit by a strike at its Houston refinery, reported a half-year net of $19 million, down from $23 million in 1951.

If, as seemed likely, overall second-quarter totals would be lower than a year ago, third-quarter results were almost sure to be worse. By then the effects of the long steel strike would show.

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